20150608-大华继显-地区研究报告_27页_1mb

报告摘要

Regional Morning Notes Summary - 08 June 2015

Core Content

This document provides a comprehensive overview of the regional financial and economic landscape, with a focus on China, Hong Kong, Indonesia, Malaysia, and Thailand. It includes market updates, sector performance, corporate events, key indices, and stock recommendations across different regions and industries.

Main Points

Aviation Sector - Regional

MERS Outbreak Impact: A potential MERS outbreak in South Korea is expected to reduce demand for high-yielding regional routes, posing greater downside risk for Chinese airlines.
Chinese Airlines: Air China, China Eastern Airlines (CEA), and China Southern Airlines (CSA) are recommended to be sold due to potential earnings surprises and higher valuations.
SIA (Singapore Airlines): SIA has less downside risk due to its low P/B valuation (close to the SARS period level) and strong fuel efficiency initiatives.
Key Assumptions: The fair value P/B for Chinese airlines has been revised upward, and SIA's fair value has been lowered.
Chart Analysis: Chinese airlines have higher valuations and thus greater upside risk compared to SIA.

China Economics

Liquidity Conditions: Despite 23 IPOs totaling Rmb22.884b, liquidity conditions remained loose, with the central bank continuing targeted easing.
Policy Reforms: New reforms were announced to support start-up enterprises, industry upgrades, and SOE reforms.
Exchange Rate: The CNY exchange rate remained stable, with the central parity rate at 6.1181 against the USD.
Economic Indicators: Key economic indicators such as CPI, PPI, and retail sales will be released, expected to show signs of stabilization.

Property Sector - China

Land Market: A strong start in June with increased demand for land replenishment in major cities due to improved sales performance.
Land Sales: Land sales in major cities (40 cities) were weak in May, but market sentiment improved. Land prices in tier-1 and tier-2 cities remained high.
Land Premium: The premium over bid rate in tier-1 and tier-2 cities was notably high, indicating strong demand.
Developer Activity: Developers with strong cash positions and low gearing, such as Vanke, COLI, and CRL, are well-positioned for land replenishment.
Sector Recommendation: Maintain MARKET WEIGHT for the property sector.

Key Information

Indices Overview

Index	Previous Close	1D %	1W %	1M %	YTD %
DJIA	17849.5	(0.3)	(0.9)	(1.9)	0.1
S&P 500	2092.8	(0.1)	(0.7)	(1.1)	1.6
FTSE 100	6804.6	(0.8)	(2.6)	(3.4)	3.6
AS30	5506.5	(0.1)	(4.6)	(2.3)	2.2
CSI 300	5230.6	0.9	8.1	14.7	48.0
FSSTI	3333.7	(0.3)	(2.5)	(3.4)	(0.9)
HSI	27260.2	(1.1)	(0.6)	(1.2)	15.5
KLCI	2068.1	(0.2)	(2.2)	(0.8)	8.0
Nikkei 225	20460.9	(0.1)	(0.5)	5.6	17.2
BDI	610	1.2	3.6	6.3	(22.0)
CPO	2282	0.5	4.9	9.6	(0.7)
Nymex Crude	59	(0.6)	(2.4)	(1.0)	10.3

Top Picks

BUY: Beijing Capital (694 HK), ICBC (1398 HK), Bank BJB (BJBR J), Maybank (MAY MK), DBS (DBS SP), Pacific Radiance (PACRA SP), Krung Thai Bank (KTB TB), Scientect (SCI MK), Great Wall Motor (2233 HK), AKRA, LPPF, TELE.
SELL: UMWH Holdings (UMWH MK), BYD (1211 HK), Great Wall Motor (2233 HK), Chow Tai Fook (1929 HK), Shimao Property (813 HK), Poly Property (119 HK), etc.

Corporate Events

Pacific Radiance Luncheon: 19 June, Singapore
M3 Marine Group Luncheon: 25 June, Singapore

Sector Updates

Aviation

MERS Impact: Chinese airlines are more exposed due to their significant international seat capacity to South Korea.
Stock Recommendations: SIA is recommended to be held, while Air China, CEA, and CSA are recommended to be sold.
Risk: MERS contagion remains a key risk.

Property

Land Sales: Weak in May but improved sentiment.
Land Premium: High in tier-1 and tier-2 cities, with a notable Rmb8.8b land acquisition by CRL and Huafa Industrial.
Developer Preference: Developers with strong financial positions and low gearing, such as Vanke, COLI, and CRL, are favored for land replenishment.

Analyst Notes

K Ajith (Aviation): Highlights the impact of MERS on Chinese airlines and the relative stability of SIA.
Chaoping Zhu (Economics): Notes the central bank's continued liquidity support and the importance of reform in driving long-term growth.
Edison Bian & David Yang (Property): Emphasizes the importance of landbank exposure and funding costs in evaluating developers.

Key Assumptions

Metric	2013	2014	2015F
GDP (yoy)	2.2	2.4	2.9
Euro Zone	-0.5	0.9	1.3
Japan	1.6	-0.1	1.0
Singapore	4.4	2.9	2.9
Malaysia	4.7	6.0	5.0
Thailand	2.8	0.9	2.7
Indonesia	5.6	5.0	5.0
Hong Kong	2.9	3.5	3.7
China	7.7	7.2	7.0

Brent Oil: Rmb99.45 in 2014, Rmb65 in 2015F, Rmb70 in 2016F.
CPO: Rmb722 in 2014, Rmb765 in 2015F, Rmb788 in 2016F.
BDI: Rmb1,101 in 2014, Rmb1,300 in 2015F, Rmb1,400 in 2016F.

Summary of Key Risks

MERS Contagion: Could lead to significant demand destruction, particularly impacting Chinese airlines.
Exchange Rate Volatility: The CNY remains stable, but the PBOC's policies and market expectations could affect it.
Economic Stabilization: Expected signs of stabilization in economic indicators may lead to less aggressive monetary easing by the PBOC.

Final Notes

The document highlights the importance of valuations and market sentiment in shaping investment decisions.
It suggests that while Chinese airlines face risks due to MERS, SIA is relatively more resilient.
In the property sector, land replenishment is expected to be strong in tier-1 and tier-2 cities, with a focus on developers with strong financial positions.
The PBOC continues to support liquidity through targeted measures, including PSL and CDs.

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